Industrial and financial shares dragged the most on the S&P 500, with heavy equipment maker Caterpillar Inc off 2.3 percent at $55.65, and JP Morgan Chase & Co down 2 percent at $40.05.

The government said durable goods orders, which gauge demand for a wide range of long-lasting U.S. manufactured goods, unexpectedly fell in January, while the number of workers filing claims for jobless benefits rose to 496,000 last week.

It is a sluggish (economic) rebound, and I think we're seeing some concerns of that surfacing for the markets, said Steve Goldman, market strategist at Weeden & Co in Greenwich, Connecticut.

Coca-Cola Co contributed the most to the Dow's slide after it said it will acquire the North American bottling businesses of Coca-Cola Enterprises Inc for about $13 billion. Coke shares fell 4.2 percent to $52.86, while CCE soared 33.6 percent to $25.63.

Chevron Corp shed 1.3 percent to $71.40 as crude oil prices tumbled more than 3 percent, pressured by concerns about the economy.

Health insurance stocks were in focus as U.S. President Barack Obama opened a healthcare reform summit in Washington. The Morgan Stanley healthcare payor index fell 1 percent.

Moody's said a change in Greece's rating would depend on whether Athens could smoothly enact a fiscal reform plan, while Standard & Poor's said a downgrade by one or two notches in the next month was possible. The move could increase borrowing costs and exacerbate Greece's problems.

Thursday's U.S. economic data came on top of disappointing data on consumer sentiment and home prices earlier this week.

Following ongoing concerns of hackers interfering with the 2016 Presidential election, President Barack Obama has called for a complete report into hacking efforts that took place during the election cycle.